Who Can Claim the Mortgage Interest Deduction With Co-Owners?

When a house has more than one owner, the mortgage interest deduction with co-owners is split by who actually paid. Each co-owner who is legally obligated on the mortgage and personally paid interest during the year can deduct their own share on Schedule A, provided they itemize. Ownership percentage on the deed does not control the split, and the total claimed across all co-owners cannot exceed what the lender reported.

The Two Tests Every Co-Owner Must Pass

Before anyone deducts a dollar of mortgage interest, the IRS applies two conditions. Fail either one and the deduction is gone, no matter what the deed says or what the co-owners agreed to among themselves.

The first is legal liability. Your name has to be on the mortgage note as a borrower, making you personally obligated to repay the debt. Being on the title or deed is not enough. Co-owners sometimes learn this the hard way when they own half the property but never signed anything at the lender’s office; the IRS treats them as having no deductible mortgage debt.¹

The second is actual payment. You can only deduct interest you personally paid during the tax year. A co-borrower who is on the note but contributed nothing toward payments that year deducts nothing. What the co-owners had agreed to pay does not matter; the IRS looks at what was actually paid.

The Joint Account Presumption

When mortgage payments come out of a joint bank account where both co-owners have an equal interest, the IRS presumes each owner paid half the interest. That presumption stands unless a co-owner can show unequal contributions to the account or a different payment arrangement.¹

How the Deduction Gets Split

The split follows the money. If two co-owners each cover exactly half the mortgage from separate funds, each deducts 50% of the total interest. If the split is 70/30, the deduction follows that ratio. If one co-owner pays the entire mortgage all year while the other pays nothing, the paying co-owner deducts 100%, regardless of what the deed says about ownership shares.

The combined deductions claimed by all co-owners cannot exceed the total interest reported by the lender on Form 1098. This is one of the easier mismatches for the IRS to catch, since the agency can line up the 1098 total against the Schedule A amounts filed by each borrower.

Reporting When Only One Co-Owner Gets the 1098

Lenders issue Form 1098 when more than $600 in mortgage interest was paid during the year, but they typically send it to only one borrower.² The other co-owners do not lose their deduction. They just report it on a different line.

The co-owner who receives the 1098 reports only their own share of the interest on Schedule A, line 8a, and should tell the other co-borrowers what their shares are.³

Co-owners who did not receive the 1098 report their share on Schedule A, line 8b, the line designated for mortgage interest not reported on a 1098 sent to them. They must identify the name and address of the person who received the 1098. Paper filers should attach a statement explaining how the interest was divided and write “See attached” next to line 8b.⁴ This cross-reference lets the IRS confirm that the total claimed across all co-owners does not exceed the lender’s number.

Itemizing Is Still a Threshold Question

None of this matters if you take the standard deduction. To claim mortgage interest at all, you have to itemize on Schedule A. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.⁵ If your share of the mortgage interest plus your other itemizable expenses (property taxes, charitable gifts, and so on) does not clear that threshold, you get no benefit from claiming it.

Each co-owner runs this calculation on their own return. One co-owner may itemize while another takes the standard deduction; the choices are independent.

Mortgage Debt Limits, and Why Unmarried Co-Owners Come Out Ahead

For mortgages taken out after December 15, 2017, interest is deductible on up to $750,000 of mortgage debt ($375,000 for married filing separately). Older mortgages taken out on or before that date carry a $1 million limit ($500,000 for married filing separately). The One Big Beautiful Bill Act made the $750,000 limit permanent, so the earlier expectation that it would revert to $1 million for 2026 no longer applies.¹

For unmarried co-owners, the math shifts in their favor. In Voss v. Commissioner, the Ninth Circuit held that the mortgage debt limit applies per taxpayer, not per residence.⁶ Two unmarried co-borrowers on a post-2017 mortgage can each deduct interest on up to $750,000 of debt, covering as much as $1.5 million in combined mortgage debt. A married couple filing jointly shares a single $750,000 cap. The IRS acquiesced to the Voss decision, though courts outside the Ninth Circuit are not bound by it.

Married Co-Owners

Married couples filing jointly deduct the full amount of qualifying mortgage interest on their single return without splitting anything. Whose name is on the note and who wrote the checks does not matter. The joint return treats them as one taxpayer.

Filing separately changes that. Each spouse deducts only interest they personally paid, following the same rules as any other co-owner arrangement, and the debt limit drops to $375,000 per spouse for post-2017 mortgages.¹ If one spouse itemizes when filing separately, the other must itemize too, which can force the second spouse into a smaller total deduction than the standard deduction would have provided.

Co-Owners Not on the Mortgage Note: Equitable Ownership

There is a narrow exception for someone who pays a mortgage but whose name is nowhere on the note. Under Treasury Regulation 1.163-1(b), a taxpayer who is the “legal or equitable owner” of property securing a mortgage can deduct the interest they pay even without personal liability on the debt.⁷

Proving equitable ownership is harder than it sounds. Tax courts have required the taxpayer to show they carry the real benefits and burdens of owning the home: making all the mortgage payments directly to the lender, paying property taxes, covering insurance and maintenance, and actually living there. Courts have denied the deduction when taxpayers could not produce documentation to support the claim. A written agreement between co-owners spelling out who bears which financial responsibilities is a far stronger record than testimony reconstructed after the fact. If you pay the mortgage on a home where you are not on the note, put that arrangement in writing before filing season.

One Boundary: The Home Has to Qualify

The mortgage interest deduction only applies to a “qualified home,” meaning your main home or one second home. A second home rented out for part of the year still qualifies only if you personally use it for more than 14 days or more than 10% of the rental days, whichever is longer.¹ Co-owners of a third property, a pure rental, or an investment property cannot claim the deduction for that property on Schedule A, though the interest may be deductible elsewhere on the return as a business or investment expense.

Documentation to Keep

The co-owner who does not receive the 1098 carries the heavier documentation burden, but both parties should keep records. Useful evidence includes bank statements showing mortgage payments, canceled checks made out to the lender, and records of any transfers between co-owners when one person collects funds and pays the lender.

A written agreement between co-owners spelling out payment responsibilities is not required by the IRS, but it is the single strongest piece of evidence if questions arise. A short signed document stating who pays what percentage, and from which accounts, removes ambiguity years later. Keep these records for at least three years from the date you file the return claiming the deduction.⁸

1
Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction
2
Internal Revenue Service. About Form 1098, Mortgage Interest Statement
3
Internal Revenue Service. Publication 936 (2025), Home Mortgage Interest Deduction – Section: How To Report
4
Internal Revenue Service. Instructions for Schedule A (Form 1040)
5
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
6
Internal Revenue Service. AOD 2016-02 – Voss v. Commissioner
7
GovInfo. Internal Revenue Service, Treasury Reg 1.163-1
8
Internal Revenue Service. How Long Should I Keep Records?